To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment he has made of the potential effect of covid-19 restrictions on trends in the level of small businesses filing for bankruptcy in January 2021; and what steps he taking to help mitigate that effect.
3 December 2020
In response to the pandemic, the Government has put in place an unprecedented package of support for businesses, including job support schemes, over £60 billion in grants and loans, and cuts to VAT and business rates relief. The Government has also introduced temporary measures in the Corporate Insolvency and Governance Act to support businesses to keep going through the pandemic, including restricting the use of statutory demands and company winding-up petitions, and suspending the wrongful trading provisions.
The Office for Budget Responsibility (OBR) judged, in its recent Economic and Fiscal Outlook, that these measures, together with forbearance on the part of creditors, have helped to reduce the number of insolvencies so far this year by almost a third compared to 2019. The Government has recently extended its package of support measures through to March 2021 to continue to support businesses as the economy emerges from the pandemic.